With its new mega-airport now operational, Dubai is primed to pursue its ambition of becoming a world-beating international trade hub
Dubai has been a trading port since its first modern incarnation in the early 1800s. Geographically positioned on the oceanic trade routes between Asia, Africa and Europe, and historically one of the primary points for trade to and from Iran, the city state’s port and creek has been a supply and logistics hub since the 19th century.
‘Dubai World Central will not only cater to the region’s economic growth, but will be a strong catalyst for our next level of development as a truly global commercial, trade and logistics hub’
As the property boom that had fuelled the emirate’s growth from the turn of the millennium, and brought the UAE to the world’s attention with a range of evermore fantastical keynote projects, came grinding to a total halt late in 2008, the Dubai authorities decided to return their attention to more traditional – and sustainable – growth plans.
Back to basics
Indeed with the barrage of news that some Dubai-based organisations were struggling to balance the books, one entity, DP World (Dubai Ports), quietly continued to prosper as a focal point for global trade.
Girded by fresh financial support, Dubai is continuing with its mid- to long-term plans to expand, modernise and renovate its energy, transport and logistical infrastructure, building on its positioning as a primary hub for businesses, logistics and re-export in the Gulf.
“Dubai is important because of Jebel Ali, the free zone and the space to expand. Most importers are based there so the logistics providers need to be there. Jebel Ali is certainly the biggest port for us in terms of shipping and road transport,” says Garry Kemp, DHL Managing Director for the Middle East, North Africa and Turkey.
Taking to the skies
Dubai has looked to build on its existing port and road freight infrastructure by increasing its capacity for air freight throughput. Central to this is the scheme to expand cargo potential by linking the current port facilities at Jebel Ali with the newly-opened first phase of the Dubai World Central-Al Maktoum International Airport. The new facility is the emirate’s second air hub alongside Dubai International Airport, which operates as the ‘home’ base for Emirates Airline.
Air traffic in the UAE grew by 8.7 per cent year-on-year in August, with Dubai accounting for almost half of that figure. The growth is further fuelled by the emirate’s geographical location four hours’ flight time from a third of the world’s population, and 12 hours’ flight time from 80 per cent.
Soaring above the competition
Dubai World Central–Al Maktoum International was first announced back in 2004 as part of an extremely ambitious plan to develop the world’s biggest airport. Once complete, the project, which is being rolled out over several phases over the coming decades, will have five runways, four terminal buildings and capacity for 160m passengers and 12m tonnes of cargo annually – impressively making it the largest airport in the world. “This forecast, combined with our projections for 98m passengers by 2020, clearly shows the need for a new airport. Aviation accounts for about 25 per cent of Dubai’s GDP and our strategy is to have capacity lead demand so we never constrain growth. Aviation is too important to Dubai’s economy to fall prey to the short-term thinking that has led to costly capacity constraints and congestion at so many airports around the world,” Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Department of Civil Aviation, Chairman of Dubai Airports, and Chairman and CEO of Emirates Group said in May.
The first phase, which officially opened on 27 June, has one runway large enough to accommodate the next generation of aeroplanes (including the A380 super-jumbo), giving it a head start on a number of established air hubs, as well as 64 remote stands, a passenger terminal designed for 5m passengers per year, and a cargo terminal with capacity for 250,000 tonnes annually, expandable to 600,000 tonnes.
Paul Griffiths, CEO of Dubai Airports, has said that the Dubai World Central development is part of Dubai’s planning for the future, and is clearly a long-term project: “Phase 1 [Al Maktoum International] will provide much-needed freight capacity in the near to mid-term. The vision is to eventually develop Dubai World Central–Al Maktoum International into a multi-modal logistics hub which capitalises on its ideal location next to Jebel Ali Port as well as its connectivity by air to major consumer markets worldwide.”
Gateway to the Middle East
A large part of Dubai’s drive to encourage international companies to invest in the emirate and use it as their headquarters for the region is the creation of a number of free zones, allowing 100 per cent foreign ownership of companies and access to state-of-the art infrastructure and facilities. The Dubai Airport Freezone, situated alongside Dubai International Airport, has recorded an increase of 63 per cent in its sales in the first six months of 2010 compared with the first half of the previous year.
Similarly, Jebel Ali Free Zone (JAFZA), which covers the area’s port, cargo and logistics developments, has also benefited from continued investment. “Dubai is still very important geographically as a logistics and shipping hub. It is the main port in the region and it gives access to Arab markets as well as East African and Caspian markets,” says Lars Safverstrom, Group President of logistics and shipping group GAC.
Dubai World Central (DWC), the recently established focal point of Dubai’s logistics and freight enterprises and umbrella group for Al Maktoum International, is based on the outskirts of the main cargo port, at Jebel Ali.
The linking of Jebel Ali Free Zone Authority (JAFZA) to Dubai World Central is part of Al Maktoum International’s recipe for success, creating one of the largest multimodal logistics platforms in the world, branded the ‘Dubai Logistics Corridor’.
The agreement sets out to create a transport and logistics corridor, linking sea, land and air, and bringing together for the first time in the Middle East all the components needed to create a multi-modal logistics platform. The aim is to allow for the transportation of cargo from sea to land and air in record time by creating a single customs entry point, meaning that freight will be able to be moved from one transport system to another through only one registration, licensing, and management process.
“DWC will establish Jebel Ali as a full multi-modal hub, with swift movements of cargo from sea to air, road and, in time, rail. Our aspiration is for a four-hour transition from sea container to aircraft pallet,” Andrew Walsh, Vice-President of cargo and logistics for Dubai Airports, was quoted in MEED magazine.
“As one of the most ambitious projects of its kind in the world, Dubai World Central’s connectivity to the Jebel Ali Free Zone and Port creates a logistics corridor that has facilitated a seamless logistics process for Danzas,” says Stefan Fallet, Country Manager, Danzas AEI Emirates. “The logistics infrastructure and proximity of the free zone to air and sea connection points increase the operational efficiency of cargo movement from Jafza South – our single-largest logistics facility in the Middle East – to airfreight operations at DWC.”
With the burgeoning development of the DWC-Al Maktoum International Airport, the continued planned investment in its facilities and the forecast growth in Dubai’s role as the leading trade and re-export hub regionally and, potentially, globally, its future looks set to soar.